Town Hall 10/12/05
Forum Link: Original Post Town Hall with Lawrence Linden 10/12/2005 Topic: LindeX service and SL economics. 9 am Town Hall Jeska Linden: Thanks for coming out everyone Jeska Linden: Welcome to the Town Hall with Lawrence Linden! We're here today to discuss the new LindeX and SL economics. Jeska Linden: First some guidelines for the discussion. We will be focusing this Town Hall on questions about the economy, please don't submit your technical support or other off-topic questions, as they will be skipped over. Robin Linden: hi all! Jeska Linden: Also, for those who have joined us here, I'd like to ask you to please hold down the chat and offers of friendship until after the meeting as it can be distracting. Jeska Linden: Lawrence is going to open with a brief introduction and then answer some of the questions which were posted beforehand in the forums. Jeska Linden: Then we will go into an open QA. Questions can be sent to me (Jeska Linden) in the form of an IM. Jeska Linden: Questions will be answered in the order they appear on my screen. Jeska Linden: Ok, take it away Lawrence. Lawrence Linden: Welcome everyone. Lawrence Linden: This is my first Townhall here as part of the Linden Lab team. Lawrence Linden: I'm a software engineer for Linden Lab, and I also currently manage the web team. Lawrence Linden: I moved to Linde Lab from working as Live Team Lead on Ultima Online. Lawrence Linden: I'm a long time gamer, and an a thorough internet addict. Lawrence Linden: OK, enough about me. Lawrence Linden: Let me talk about LindeX a bit then we'll move on to your questions. Lawrence Linden: By introducing a Linden Labs run currency exchange we hope to fuel the in world economy back making L$ more accessible to people who don't have enough. Lawrence Linden: We predict that this should dramatically increase the amount of L$ that change hands in-world every day. Lawrence Linden: We wanted to especially ensure that new Residents had easy access to L$ without having to take yet another leap of trust to sign up with a thrid party. Lawrence Linden: We wanted to make sure that people could use the same forms of payments that they currently use to pay for their accounts, currenty credit card or Paypal. Lawrence Linden: So how's it going? So far L$16.4M had changed hands using LindeX. That's more than US$61,000 at the rates that the L$ were exchanged. Lawrence Linden: Nearly 1600 unique Residents have successfully purchased or sold L$ using LindeX. Lawrence Linden: We've seen the L$ rebound from about L$300/US1.00 to L$265/US1.00 (about $US3.33/L$1000 to $US3.75/L$1000.) Lawrence Linden: Many people are taking advantage of the ability to easily pay their premium, and tier fees by selling currency on LindeX. Lawrence Linden: New Residents are purchasing more L$ during their first week. Lawrence Linden: It's time to answer some questions from the forums. Jeska Linden: Escort DeFarge asks: "Does LindeX have any kind of policy targets or limits, for example USD/SLD exchange rates or exchange stability? If so, what are they and how will such policy targets be limited?" Lawrence Linden: From the LindeX perspective, it is just an exchange, the trading limits are really just to address our fraud concerns. From a broader economic point of view, we want to stabilize the currency erring on the side of slight growth against the US$. Lawrence Linden: We want L$ to remain a form of micro payment system, so L$250/US$1.00 is the target at this time. We're currently developing a more detailed policy. Jeska Linden: SuezanneC Baskerville asks: "My account uses a debit card instead of a credit card. It would be exceedingly convenient to have proceeds from a sale of $L sent right to the debit card account instead of having to email for a check. Do you plan to be able. Jeska Linden: to do this and if so how long will it take to get it implemented?" Lawrence Linden: No, at this time we don't plan to do that. Right now debit cards are billed as Visa or Mastercard and we can't credit to those accounts, except by reversing previous charges. This is a restriction imposed by the credit card companies themselves. Lawrence Linden: We aren't currently looking at directly billing debit cards as debit cards, so we're unlikely to be able to credit to a debit card anytime soon. On a related note, we are actively pursuing accepting additional forms of payment that are popular outside Lawrence Linden: the US. Jeska Linden: Neptune Rebel asks: "Without knowing how many "blocks" of 1000L someone wants to sell or buy on the LindeX, how can an exchange be fulfilled if it exceeds the blocks up for purchase/sale? Jeska Linden: For example, I want to sell 30000L or 30 blocks, at 250 L/$. But there currently is only a request to purchase 25 blocks at 250 L/$. What happens to the remaining 5 blocks?" Lawrence Linden: Right now LindeX only supports limit sell orders, and market buy orders. The limits sell orders can be partially filled, and the market buy orders can span multiple sell order if necessary. Lawrence Linden: LindeX does not have a concept of blocks, or minimum fill sizes. So, altering your scenario to fit the mechanics of LindeX here's what would happen: Lawrence Linden: you place L$30000 up for sale at a limit rate of L$250/US$1.00, a buyer sees your L$ up for sale and buys L$25000 at L$250/US$1.00, your account is credited US$ for the sale, your remaining L$5000 remains up for sale at L$250/US$1.00 until you cancel the Lawrence Linden: remainder of the order or other buyer(s) purchase the remainder. Jeska Linden: Korhall Moonlight asks: "many people that is disabled in real and cant buy $L because they only have the money to buy a basic account to enjoy SL... Jeska Linden: many of us host, build or even manege a club to earn the money we need. arre you planning to help the people who has very little $L and cant buy what they want or need?" Lawrence Linden: We hope that LindeX will fuel the economy which should ultimately help all in-world businesses. Also, when you sell L$ on LindeX, you can leave the US$ proceeds in your account and have them directly applied to premium account, tier, and island fees. Lawrence Linden: That may make it easier to jump start an in-world business without much initial US$ investment. Jeska Linden: Gwyneth Llewelyn asks: If a brief "Introduction to SL Economics" is too much trouble to hold during a TH meeting, would you consider to have a white paper on it posted somewhere on the SL website or as a "sticky" in the forums (or at the very least on Jeska Linden: one of the Linden blogs) so that baffled and confused residents can look it up somewhere?" Lawrence Linden: It's a bit outside what I had in mind for this townhall, but it sounds like it would go great along side a description of economic policy. I'll talk to Philip and Cory about creating a document that gives a good overview of the SL economy. Lawrence Linden: Along those same lines, we plan on improving the quality and quantity of the economic information we share on the website. Jeska Linden: Ok, that was everything from the forums. Jeska Linden: Now we'll open it up for some q and a :) Jeska Linden: Questions should be submitted to me (Jeska Linden) via IM please! Jeska Linden: Forseti Svarog: what is LL's take on blaze's request the forums for detailed, albeit anonymous, per-trade information on the Lindex? I'm most interested right now in getting historical data for the lindeX. Lawrence Linden: I really like that idea, I think it will help build additional knowledge about the SL economy. It's on the list of economic information that I'd like to make available. At this point I don't see any barriers to providing that information. Jeska Linden: ReallyRick Metropolitan: Has there been any thought about offering a "First Land" type discount to new residents buying $Lon their first purchase. Also are their any plans to offer a discount say if you buy a large quanity of L$ at one time say L$100K Jeska Linden: or more? Lawrence Linden: I have not thought about that. Perhaps other Linde's have. To do that we'd have to make a US$ subsidy to people's purchases. Remember, we're not selling L$, we're facilitating an exchange of L$ between Residents. We don't set pricing. Jeska Linden: Moonshine Herbst: What's with e-check some of us get with PayPal Payments? Does it mean we will have to wait 5 days for money to clear every time? Lawrence Linden: No, we're currently finalizing the setup for the Paypal account we wish to use with the exchange, and are making a transition between accounts. I think we underestimated the volume of Paypal payments we'd be making this week, so instead of having Lawrence Linden: cleared funds to draw upon it's rolling over to another form of payment, hence the delays. This should be a temporary situation. We appologize for the delays. Jeska Linden: Michael McLuhan: How long has the process of currecnty exchange been under discussion there at the offices of LL? Lawrence Linden: It predates my arrival at LL. I expect that Linden's have been thinking about it for a long time. Jeska Linden: Ralek Queso: can we have an ETA on automated US$ withdrawals from our LL accounts and what sort of withdrawal fee are you contemplating once that automation is in place? Jeska Linden: Pete - please send questions to me via IM :) Lawrence Linden: We're currently working on automating Paypal withdrawls. I don't have a specific ETA for deployment at the moment, but I'm trying to have it ready for internal testing next week. As for the fees... the withdrawl fees are inteded to cover our costs. Lawrence Linden: It appears that PayPal will charge 20%, or upto $1.00 to make payments with their Mass Payment system. I expect we might settle on charging a flat rate that covers those fees plus any other expenses. I'm going to recommend a flat $1.00 fee to Philip. Jeska Linden: Domonee Benton: With free basic accounts and all the positive press SL is getting, we can expect a huge influx of new Residents, hopefully the needed base to give SL's economy a boost. What can the average avatar do to help insure this actually happens? Lawrence Linden: A lot of new Residents are refered by existing Residents, so please help get the word out about SL. Lawrence Linden: There are a number of ways to help in-world as well. Consider signing up for the greeter or mentor programs and showing new Residents the ropes. Lawrence Linden: Help out in the welsome areas, offer tours to new residents. Help them understand how to buy and wear things without becoming blockheads. :) Jeska Linden: Prokofy Neva: Would it be possible for your to collect and publish the aggregate information of "last 10 things sold inworld" on a historigram type basis over 30-90 days, especially so we could see the pattern of telehub sales? Lawrence Linden: That sounds possible, but it's not something we've put much thought into. I'll take this request into consideration as we make more economic data available. Jeska Linden: Pete Lawson: My question is...why did GOM leave sl? Lawrence Linden: It's not really my place to answer that. There's a detailed post from Jamie that you should be able to locate with a search of the forums that answers that question. Jeska Linden: ReallyRick Metropolitan: What is the reasoning behind imposing limits on the ammount of L$ one can buy or sell in a given month? Lawrence Linden: In general the limits are bout fraud control at this point. In the first few days of operation the limits were also used to more slowly ramp up volume. Lawrence Linden: As for monthly limits in particular the US$40 monthly limit for new Residents is specifically to reduce a particular type of fraud. Jeska Linden: We've got time for a few more... Jeska Linden: Forseti Svarog: Is LL planning on integrating access to the Lindex into the client? a button for example? Lawrence Linden: Yes. We are planning make it easy to purchase L$ anytime you try to buy something that costs more than your available L$. The in-client interface is likely to resemple the buy page of the basic interface mode of the web interface to LindeX. Jeska Linden: Prokofy Neva: After you change our Linden dollars to US dollars, will you be holding a "float" upon which you make money like a bank, i.e. at the PayPal money market? Lawrence Linden: Right now those US$ are just a credit on your account... I'm not aware of any plans to try to put those funds in a money market account. Jeska Linden: OK, last question - Jeska Linden: Neo Craven: Is there a limit as to how much in $USD you can request to be sent to your paypal account? Lawrence Linden: You can request as much as you want... however we won't send you more US$ than you have in your account less the fee. In reality there may be limits on how much PayPal will let us move in a single transaction. One of our finance people could Lawrence Linden: better answer this question. Jeska Linden: Thanks for coming out everyone _ i will be posting the log from this in the forums. Jeska Linden: There will be another town hall with Lawrence later this afternoon! Lawrence Linden: Thank you all for attending this townhall, we appreciate your questions. 3 pm Town Hall Jeska Linden: Welcome to the Town Hall with Lawrence Linden! We're here today to discuss the new LindeX and SL economics. Jeska Linden: First some guidelines for the discussion. We will be focusing this Town Hall on questions about the economy, please don't submit your technical support or other off-topic questions, as they will be skipped over. Jeska Linden: Also, for those who have joined us here, I'd like to ask you to please hold down the chat and offers of friendship until after the meeting as it can be distracting. Jeska Linden: Lawrence is going to open with a brief introduction and then we'll go into an open QA/ Jeska Linden: Questions can be sent to me (Jeska Linden) in the form of an IM. Questions will be answered in the order they appear on my screen. Jeska Linden: Ok, take it away Lawrence. Lawrence Linden: Welcome everyone. This is my second Townhall meeting. Lawrence Linden: I'm a software engineer working for LindenLab, and I also manage the web team. Lawrence Linden: Before working at LL I was Live Team Lead for Ultima Online. Lawrence Linden: I'm a long-time gamer, a internet addict. Lawrence Linden: Anyway, on to the topic of the the SL economy and LindeX. Let me start with a status update on LindeX then we'll move on to your questions. Lawrence Linden: *fetching fresh stats* Lawrence Linden: By introducing a Linden Lab run currency exchange we hope to continue to fuel the in-world economy by making L$ more accessible to consumers. Lawrence Linden: We predict that this should dramatically increase the number of L$ that change hands each day. Lawrence Linden: We want to ensure that new residents have easy access to additional L$ without having to take yet another leap of trust to sign up and give payment information to a thrid party. Lawrence Linden: We want to make sure that people can use the same forms of payment that they already use to pay for their accounts, currently credit cards and Paypal. Lawrence Linden: So how is LindeX doing? So far more than L$17,000,000 has changed hands using LindeX. That's nearly US$64,000 at the rates that the L$ were exchanged. Lawrence Linden: Nearly 1,650 unique residents have bought or sold L$ using LindeX. Lawrence Linden: We've seen the L$ rebound from about L$300/US$1.00 to L$267/US$1.00 (about US$3.33/L$1000 to US$3.74/L$1000) Lawrence Linden: Many people are taking advantage of the ability to easily pay their premium and tier fees by selling currency on LindeX Lawrence Linden: New residents are purchasing more L$ during their first week. Lawrence Linden: On to your questions... Jeska Linden: Sherrade Stirling: How are you doing with regards to the paypal fee? are you closer to bringing it down or is there a timeline for that? Jeska Linden: Please submit questions by Iming them to me Lawrence Linden: I'm working on the automation necessary to significantly reduce that fee. I'm hoping to have it ready for internal testing sometime next week. There is currently no ETA for its deployment, but it's one of our highest priorities right now. Jeska Linden: EsTeBaNo Dassin: Does the lindex currency price will get higher or it will stay like now forever? Lawrence Linden: It will change based upon market conditions. The Lindens would like to see the L$ remain relatively stable so it's likely that we'll make economic adjustments in line with that policy. However it is a resident to resident exchange. You all set Lawrence Linden: the prices, we don't. Jeska Linden: Slitch Nilsson: Could you explain more about how this is not Selling L$ but rather trading L$ and thereby driving up the L$ value with increased demand...some here don't seem to understand... Jeska Linden: I think that they may think more L$ are being added to economy ergo inflation! Lawrence Linden: Yes, LindeX is simply an exchange. Other residents offer L$ for sale at a price of their choosing. When someone goes to purchase L$ they are puchasing those L$ from other residents. We are not creating any new L$ in this process, we Lawrence Linden: have simply provided a place for Residents to to exchange L$ for US$. Lawrence Linden: The value of the L$ will vary based upon a number of factors, but largely it is driven on a day-to-day basis by supply and demand. Jeska Linden: Jordan Shatner: How do you forsee this effecting the value of the Linden dollar in the long term? Lawrence Linden: I expect the demand to be much higher than it has been in the past, and the supply to be somewhat higher. I believe that will tend to keep the L$ stronger against the US$. However, there are many factors that impact the exchange rate. Even something Lawrence Linden: simple as the mechanics of the market can have a substantial impact upon the market behavior, and thus the price of L$. Lawrence Linden: LL would like L$ to remain a micro currency because we belive the facilitates a lot of type of commerce that would not otherwise be possible. Likewise we want to help protect people's stake in the world. Jeska Linden: jamyi Rolland: Is there any possible way the weekly allowance of 50L i think - is going to go higher? Lawrence Linden: We will continue to make adjustments to any parts of the economy that make sense to the overall health of the SL economy. So I definitely wouldn't ruleout stipend adjustments. As for them going higher, if at some point that would appear to have a Lawrence Linden: net positive impact then we will consider it. Jeska Linden: Zen Golding: What do you plan to do about the value of L? [ Zen also suggested installing a lottery as a sink of $L). Lawrence Linden: The first thing we plan to do it closely observe the impact of the LindeX before making other adjustments. Part of that means completing all the major features of LindeX, including: Lawrence Linden: in-client interface for purchasing L$, paypal payment automation, and limit buy and market sell orders Jeska Linden: Please keep it down everyone. Lawrence Linden: as those feature make dramtically impact how LindeX is used and thus alter the value of the L$ on LindeX. Lawrence Linden: After we've performed that analysis, we can look at wether we need more sources or sinks of L$ to further improve the health of the SL economy. At this point I don't want to make any predictions. Jeska Linden: Howie Lament: just out of curiosity, any estimates on the total L$ amount in the game world? and the weekly growth? Lawrence Linden: Just a sec, and I'll take a quick peek... Lawrence Linden: There is about L$390,000,000 in circulation right now. That number is up about L$11,500,000 over a week ago. Lawrence Linden: These are some of the stats the I'd like to make regularly available through the web site. I think the more we all can understand about the SL economy the better we can work together to improve it. Jeska Linden: Damanios Thetan: The amount of US$ 'held' by LL in the Lindex will probably only grow. Does LL just holds this money, or is it going to be invested/ used for something? Lawrence Linden: the US$ is simply held. Currently there are no plans to otherwise invest this money. Jeska Linden: ordan Shatner: What effect do you think the ellimination of bonus stipends will do to the econmy? Jeska Linden: ordan Shatner: What effect do you think the ellimination of bonus stipends will do to the econmy? Lawrence Linden: *adjusting for a technical difficultly with a repeater* Lawrence Linden: *just a sec* Jeska Linden: Sorry everyone. Brent Linden: This sounds like a good time to plug 1.7 !! Robin Linden: well, plug preview! Brent Linden: Looking for something to do at 4:00 PM PST (just after this event?) Robin Linden: party at 4SLT Lawrence Linden: Ellimination of bonus stipends would lower the rate at which L$ are added to the economy. Taken in isolation that should increase the value of the L$. However things aren't always that straight forward. I'd like to look more a the economic behavior of Brent Linden: We're having a HUUUUUGE party in 1.7 Preview! Brent Linden: Join us! Go to Secondlife.com/preview, download the client and log in! Brent Linden: Accounts younger than a month old may not be able to log in since the database is an older copy Brent Linden: We're shooting to get as many people into Dore as possible, we've set the max limit of avatars to 200!! Lawrence Linden: the group of recipients of the bonus stipends, to try to determine how the L$ flow would be effected, and also look at what percentage of the L$ introduced each day those bonus stipends account for before making any predictions. Jeska Linden: Alan Kiesler: Are there plans to supply an RSS or XML feed for financial data on the site, similar to the population figures on the main site? Brent Linden: So 1.7, secondlife.com/preview 4 PM SLT! (this as brought to you by SL Bug Hunters) Lawrence Linden: Absolutely. I'd like to provide several feeds related to the economy... a L$ ticker feed, a daily LindeX stats feed, a SL economy feed, and an annonymized "fills" feed that shows all of a days currency transactions less identifying data. Jeska Linden: Any more questions for Lawrence? Jeska Linden: Send 'em over to me! Jeska Linden: Hmm, that might be the problem Jeska Linden: Maczter Oddfellow: Not directly related to Lindex, but any chance the leader stats can be updated a litlle more often? current stats are from 10/7 Lawrence Linden: Yes, it's on my list of web projects... there are several "dynamic" parts of the secondlife.com and lindenlab.com sites that aren't acting very dynamic right now. The parts of the sites are targeted for improvements. Jeska Linden: Millie Thompson: What about Residents who rely on stipends for $L income and who can't afford to set aside RL funds to purchase $L? Lawrence Linden: We hope that LindeX with help drive commerce for everyone. This should open more opportunity for you to acquire L$ from the things you do in Second Life. For example, taking what your asking one step further, it wouldn't take much in terms of in-world Lawrence Linden: sales to generate enough L$ to sell each month to cover the fees for a premium account. In effect you could be enjoying SL for just the price of your own time. Lawrence Linden: As for the question of increase/reducing stipends, we do try to be inclusive in our analysis before making changes. Jeska Linden: Dominus Skye: What was the rationale on presenting data in a L$/US format rather than the $US/1000L basis that more people were previously accustomed to? Lawrence Linden: *I'm going to start repeating the questions since not everyone is able to hear them* Lawrence Linden: same lines, we plan on improving the quality and quantity of the economic information we share on the website. Lawrence Linden: *once I learn how to cut and paste again* Lawrence Linden: What was the rationale on presenting data in a L$/US format rather than the $US/1000L basis that more people were previously accustomed to? Lawrence Linden: from Dominus Skye Lawrence Linden: We largely approached the design of LindeX with a clean slate. We wanted things to be as approachable for the buyer as possible. Lawrence Linden: L$/$US1.00 seems to be the most natural way to express the rate. The means of expressing the exchange rate makes it easy to answer questions like,"how many L$ can I get for 5 bucks?" Lawrence Linden: It also made the most sense from a traditional international currency exchange perspective. Lawrence Linden: Another deciding factor was that we don't have fractional L$. we wanted a rate that cleanely expressed that concept. Also we don't have an enforced block size. We support partial fills, and have no minimum buy size. These concepts are a bit easier Lawrence Linden: to approach when the expression of the rate doesn't imply that you have to exchange L$1000 at a time. Lawrence Linden: The main drawbacks fo this approach are: It's different then what GOM used most recently, the price graphs appear to be inverted, and the daily high and low values appear to be transposed. Lawrence Linden: There were other reasons behind this that I've since forgotten. We made the decision quite a while ago... and it was a tough decision. Lawrence Linden: Jeffrey Gomez: Are there any plans to offer more services to residents? For example, one idea I heard (via Eggy Lippmann) was that we should be able to "buy" bandwidth, in the form of XML/RPC outbound requests and similar utilities. Lawrence Linden: We're always working to offer more services to residents. As for those particular services, I can't comment, I just don't know. However, in general most Lindens tend to shy away from charging L$ for things that people might expect to be a basic part of Lawrence Linden: SL. Thus I wouldn't expect use to start charging L$ for those particular services any time soon. Jeska Linden: Thanks for coming out everyone. Lawrence Linden: Thank you everyone, we appreciate your interesting in the SL economy and your suggestions. Jeska Linden: I'll be posting it in the forums when we're done. Lawrence Linden: If you can spare some time, please check out the 1.7 preview. Jeska Linden: Bye evryone Category:Town Hall Logs